2024 Year in Review: The Rising Influence of Uranium and Nuclear Energy
The year 2024 has been groundbreaking for the nuclear energy sector. From major tech companies embracing nuclear power to significant shifts in uranium pricing and policy changes, the industry has undergone rapid transformation. As we step into 2025, let’s take a look back at the key developments that shaped the uranium market and what lies ahead.
Big Tech’s Growing Support for Nuclear Energy
One of the most notable trends in 2024 was the increasing support for nuclear energy from major tech corporations. Microsoft, Amazon, Google, Meta, and Oracle have all expressed intentions to integrate nuclear power into their data center operations.
The most significant move came from Microsoft, which signed a 20-year power purchase agreement to restart the Unit 2 reactor at the Three Mile Island Nuclear Station in Pennsylvania. This reactor had been shut down in 2019 due to financial concerns but is now being revived thanks to the demand for high-energy computing, particularly for artificial intelligence (AI). Meta has also taken significant steps, issuing a request for proposals (RFP) for nuclear developers to provide between 1 and 4 gigawatts (GW) of nuclear capacity to power its data centers.
As the demand for AI and high-performance computing continues to grow, nuclear energy is emerging as a crucial solution to power these operations efficiently and sustainably.
Uranium Market Dynamics: Price Movements and Supply Challenges
The uranium market experienced substantial price movements in 2024. A major price surge occurred from Q3 2023 to Q1 2024, with spot prices doubling and term prices increasing by 20%. While prices stabilized in mid-2024, the market remains strong, with a clear price floor around $75 per pound. Experts see no clear limit to the upside, making uranium a valuable commodity moving forward.
Several factors contributed to this price surge:
- Russian Uranium Ban: The U.S. government officially banned Russian uranium imports, significantly disrupting global supply chains. The ban, signed into law in May and enforced from August 2024, prevents utilities from purchasing Russian uranium beyond 2028, with complete prohibition extending to 2040.
- Supply Constraints: Western conversion and enrichment facilities, such as those operated by Orano and Cameco, have seen skyrocketing prices due to demand far exceeding capacity.
- Increased Demand from Utilities: While some utilities hesitated in response to price hikes, long-term trends indicate growing demand, especially from U.S. power plants looking to secure stable fuel sources.
The Impact of the Russian Uranium Ban
Russia’s decision to halt uranium exports to the U.S. ahead of the ban has caused immediate disruptions. In December 2024, a shipment expected from Russia left St. Petersburg without the enriched uranium it was supposed to deliver. While U.S. utilities secured waivers from the Department of Energy, Russia’s refusal to ship uranium is already straining supply chains.
As a result, the prices of conversion and enrichment services have reached all-time highs. Utilities across the U.S. and Europe are now scrambling to secure alternative sources, leading to increased reliance on Western suppliers. However, even with capacity expansions in the West, supply remains limited, pushing prices further upward.
The Role of the New U.S. Administration
With the 2024 U.S. elections resulting in a new administration, questions arise about potential policy shifts affecting the nuclear industry. While the Russian uranium ban was passed with unanimous bipartisan support, reversing it would require new legislation—a highly unlikely scenario.
Former President Donald Trump’s energy policies suggest continued support for nuclear energy. His administration previously recognized the need to reduce reliance on foreign uranium, leading to the creation of the Strategic Uranium Reserve. Additionally, Trump’s energy advisors and key influencers, including Elon Musk and David Sacks, have strongly advocated for nuclear expansion.
Uranium Outlook for 2025: Prices Set to Rise
Industry analysts predict uranium prices will continue rising in 2025 due to:
- Tight Supply: With Russia’s ban in effect and Western suppliers struggling to meet demand, utilities will be forced to secure higher-priced contracts.
- Long-Term Contracts at High Prices: NextGen Energy, a major uranium developer, recently signed contracts with U.S. utilities at prices ranging from $75 to $150 per pound. With inflation adjustments, these contracts could reach $180 per pound by 2033.
- Growing Demand from Data Centers: Tech giants are pushing nuclear energy to power their expanding AI infrastructure, further increasing demand for uranium-based fuel.
Investment and Market Rotation in Uranium Equities
While uranium prices have soared, uranium equities, particularly smaller mining companies, have lagged. However, market experts believe this could soon change as institutional investors shift focus from major players like Cameco to smaller and mid-cap uranium producers.
Financial analysts like Larry McDonald have already recommended rotating investments into funds like URNM, which holds a basket of uranium mining stocks. As utilities increase their long-term contracts and demand remains high, uranium equities could see a significant surge in 2025.
Final Thoughts: The Future of Nuclear Energy and Uranium Markets
The nuclear industry’s resurgence in 2024 has set the stage for continued growth in 2025 and beyond. With tech companies pushing for nuclear-powered data centers, U.S. utilities seeking stable fuel sources, and global supply chains adapting to the Russian uranium ban, the uranium market is poised for long-term bullish momentum.
For investors and industry stakeholders, keeping an eye on policy changes, utility contracting trends, and ongoing supply constraints will be crucial. One thing is certain—uranium’s role in the future energy landscape has never been more critical.
